Will the Fed’s upper bound reach 4.25% or higher before 2027?

The market strongly favors that the Fed's upper bound will not reach 4.25% before 2027.

Current market probabilities indicate a high confidence in the Fed's upper bound remaining below 4.25% until 2027, with a NO probability of 91.45%. The Pulse AI also reflects a similar sentiment, albeit with slightly higher uncertainty, suggesting a consensus on the Fed's likely monetary policy trajectory.

• 1 Market probability strongly favors NO at 91.45%.
• 2 Pulse AI suggests a slightly higher YES probability at 12.05%.
• 3 Current confidence level is moderate at 65 out of 100.
• 4 Time to expiry is substantial, allowing for potential market shifts.
• 5 Market appears fairly priced with a 3.5 edge.

The FED interest rates are defined in this market by the lower or the upper bound of the target federal funds range. The decisions on the target federal fund range are made by the Federal Open Market Committee (FOMC) meetings.

This market will resolve to “Yes” if the lower or the upper bound of the target federal funds rate reaches the specified level at any point by December 31, 2026, 12:59 PM ET. Otherwise, this market will resolve to “No.”

Emergency rate cuts and hikes outside the regularly scheduled meetings will be considered.

The resolution source for this market is the official website of the Federal Reserve at:
https://www.federalreserve.gov/monetarypolicy/openmarket.htm.

This market may resolve as soon as the relevant data showing the reached level is published.